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Estate Record





AND     BUILDERS'    GUIDE.





Vol. XYII.





NEW TOEK, SATURDAY, JUNE 10, 1876.





No. 430.





I^lished Weekly by

THE REAL ESTATE RECORD ASSOCIATION

O. W. SWEET...............Peesident and Tbeasubeb

PRESTON I.SWEET...........Seceetaby.

L. ISRAELS........i................Business Manaoeb

TERMS.
ONE YEAR, in advance....$10 00.

CommunicationB should be addressed to

Nos. 345 AND 347 Bboadwat.





EENTS





The National Bank Aefc of 1862, and the Le¬
gal  Tender  Act of   1863,   those   etupendons
schemes of paper-money, conferred no greater
or more lasting benefit upon any class or inter¬
est than upon landlords and rental valuations.
The de-preciation iii real esiate that occured in
1861 afforded capitaKsts an opportunity of buy¬
ing properties at prices which were only a frac¬
tion of what rule in the present crisis.   And
these same capitalists had the gratification of
finding in less than two years that, under the
impetus of inflation, the rents they were able to
secure from this same property amounted in
many cases to 25 per cent, or 50 per cent, of
the purchase price.   These fabulous rents have
been maintained with scarcely any shrinkage or
decline until within a year or two past. Even the
panic of 1873 produced very little effect on ren¬
tal values, on account of the spasm of inflation
which attended that event, and the influence of
which lasted far into the Summer of 1874, the
period of the Grreat. Yeto.. Landlords who had
occasion to make fresh engagements in May,
1874, were sustained in their appraisements of
rental valuations by the likelihood of additional
expansion of the currency.   Those leases, made
in   1874,   where    taken  by  solvent   parties,
are   stiU   in   existence,   and   their   banefdl
effect continues to be felt.   Even the present
season,   in  the  midst  of e^iaustion,   depre¬
ciation and stagnation, has found landlords but
little inclined to meet. the exigencies of ten¬
ants, on account of their looking forward to the
influx of strangers comequent upon, the Cen¬
tennial Exhibition as a means of "bolstering"
up their extravagant rents.   "We have heretofore
adverted to this subject, and.think we can claim
to-day a realization of the very state of things
which we predicted.   The month of May has
come and gone.   The Exhibition is under full
headway, and yet our New ¥ork hotels have met
with little or no increase of business, and, with
the exception of the most fashionable quarter of
the city, and the most prosperous business sec¬
tions, where property is always in demand, and
liberal rents cheerfully paid, we see on every
hand notices of "to let" and. empty stores, in.
dicative of the unprofitable harvest which our
overreaching landlords are now reaping.   The
stubbornness, and . impracticability . of  land¬
owners generally are proverbial, but have never
received a  more striking- iUustratibn..than in





the case of onx New York landlords during the
present season.   We have heard of one promi¬
nent landlord who   notified his   tenants with
amazing condescension that they could retain
occupation of his premises at a reduction of ten
per cent, from old valuations. The empty housea
and stores which are left upon his hands will
convince him that "it takes two to make a bar¬
gain," and that landlords are no longer masters
of the situation.   After enduring thia state of
emptiness for six months or a year, these former
teoauts, in all likelihood, will in   turn notify
the landlord of a willingness to reoccupy the
old   premises   at    a   reduction   of    50   per
cent,  from the former rentals.    It  Is  unde¬
niable that the  question  of rental valuation
enters into and forms a considerable factor in all
the ramifications of business and domestic life;
and the exorbitant rents, which have been bo
persistently maintained during the past ten or
twelve years by New York landlords, have re¬
sulted in incalculable injury to our mercantile
and family life.   The pretensions of landlords
to-day constitute the principal incubus which
hangs about the neck of our prosperity.    The
stunted growth of our city, its oblong shape,
and the dearth of Kapid Transit, all combine to
favor these pretensions; and in default of wide¬
spread building activity, we can look alone to
the dire and unmitigated disasters that now rest
upon our business interests as the best means
of bringing landlords to their senses, and of
placing our city in the matter of rental valua¬
tion on a competitive plane with other cities. In
the face of a decline in vacant property amoimt-
ing   to   between sixty   and   seventy-five  per
cent., and in some cases of ninety per cent.,
with completed street improvements over nearly
the whole surface of our island, together with a
reduction in the price of labor of sixty per cent.,
and of materials forty per cent., itiseasy to fore¬
see that the combination on the part of the land¬
lords to maintain rents will ere long succumb.
The rental valuations that landlords are now
endeavoring to force upon the public are based
on old valuations of property. As new structures
spring up, created on the basis of reduced cost
of production, new and more enterprising land¬
lords will appear, who will be able successfully
to compete with those of antiquated ideas, or
with those who have foolishly invested in im¬
proved property at fabulously high prices.   All
our improved property must be marked do-wn to
the plane of the values of to-day, and rental in*
comes must be based upon these new values.
The shrinkage of invested   capital  must be
charged to profit and loss, and our landlords, in
common with all other classes of business men,
must accept the situation, and no longer hinder
the struggling   prosperity of our  citizens at
large.   As high rents contributed in as large a
degree as any other cause to i^e creation and
maintenauQe of high prices generally, so, at the





present time, low rents, within the easy ability
of tenants to pay, must be the initial point of the
new departure.    The rents of all classes of store
and dwelling accommodations must be mad«
to conform to the new order of things.   Thug
the necessaries of life will   be easily attain-
able at reduced figures, and the workingman
and the merchant will no  longer  be cheated
out of their hard-earned reward.    The long
line of untenanted stores on Broadway may be
attributed principally to the mulish stubborn¬
ness  of landlords.   Were the rents of these
properties fixed at reasonable and sensible ratee,
it is safe to say that they would be eagerly
taken, and that but few vacancies would bo
found.   The Broadway owners, however, hav¬
ing been surfeited, above all others, with ex¬
orbitant rents, are the least willing to conform
to the new state of things, and are contented to
suffer the loss of many months or years of rent
before they will yield to common sense.   The
natural law of revulsion, however, is in full
operation,  and will ultimately carry with  its
force even these unwilling owners.   The wisest
of them will be the firat to yield.     There is an
example of one owner who has already kept his
stores vacant for seven years, and it is not un¬
likely that some others wUl be foimd of the
same mind.    We may expect to find a number
of stores on that thoroughfare remain idle for
five or ten years to come.

The condition of affairs in regard to dwelling
property is very plainly asserted. Except in th«
strictly fashionable quarter, where few vacan¬
cies can be met with, the unrented houses in
tuis city may be coimted by himdreds, if not
thousands. Houses renting for fifteen hun¬
dred or two thousand dollars, heretofor*
considered of the average rate, are without
tenants to-day. Many of that class of ten¬
ants, under the pressure of the times, have
sought refuge in • the numerous apartment
houses that have been erected within the last
three years, where' they have found comfort¬
able homeB at one-half or one-third the rates de¬
manded for a whole house. As is often the case,
the landlords who hold out most stoutly at first
are the ones to give way most hopelessly at last,
and within the next two or three years we look
for such a settling down of rental valuations as
will place a comfortable home within easy reach
of the man of moderate means. The prostration
of business which is now extending into ita
third year has infused the spirit of economy,
under the hard rule of necessity, into all classes;
and landlords must make up their minds to re¬
spect this spirit, or suffer the penalty of disre¬
spect.

-—------------------» -^^^ *---------------------------

Mb. William Little having been suddenly called
a^^ay to Canada, we are without the statistics prom¬
ised in last issue of The Eecord on tlie lumber
'Supply, which omission, however, will be supplied
next week; '